The UK’s defined benefit (DB) risk transfer market is witnessing a “fundamental transformation” with insurer supply now exceeding demand for the first time in several years, Hymans Robertson has suggested.

The consultancy said the change in the market follows a ‘surge’ in transactions for DB pension schemes valued under £100m.

In 2024, the UK bulk annuity market had a record number of buy-ins, with insurers completing almost 300 transactions and writing more than £47bn of total premiums.

Schemes smaller under £100m represented just over 10 per cent of the total value but made up around 80 per cent of all buy-in and buyout transactions in 2024.

It credited a combination of growing insurer appetite, efficiency innovations and new providers joining the market for “significantly” boosting capacity, particularly for schemes under £100m, which it said is leading to greater insurer competition across all transaction sizes.

Hymans Robertson warned that on the post-transaction side insurer capacity continues to be varied, which is a key challenge for smaller schemes as there is an increasing backlog of schemes looking to convert from buy-in to a buyout.

The consultancy expects a busy second half of 2025 in the DB risk transfer market.

Hymans Robertson head of core transactions, Iain Church, said this changing makeup of the UK risk transfer market is an “exciting” time for smaller schemes.

“The transformation of the market is unprecedented; it has moved from a supply-constrained market to one where competition among insurers is intensifying with insurers increasingly able to meet the specific needs of small schemes,” he continued.

“With more providers now active in the space, insurers will need to work harder to differentiate themselves, not just on price, but critically on the service they provide, flexibility, and execution.”

Church pointed out that the opportunity lies in how quickly and effectively insurers can support schemes transitioning from buy-in to buyout.

He acknowledged that each delay drives up costs and the insurers that can combine competitive pricing and timescale certainty are more likely to “stand out” in a market that is more “dynamic and competitive” than ever.

The consultancy stated that for many schemes in the buy-in market, this shift in the market is an opportunity to secure favourable terms and have more choices in how their liabilities are managed and transferred.

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